Positive Signs As Multiple Insiders Buy Prodigy Gold Stock

It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in Prodigy Gold NL's (ASX:PRX) case, it's fantastic news for shareholders.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Prodigy Gold

The Last 12 Months Of Insider Transactions At Prodigy Gold

In fact, the recent purchase by Charles Arve was the biggest purchase of Prodigy Gold shares made by an insider individual in the last twelve months, according to our records. So it's clear an insider wanted to buy, at around the current price, which is AU$0.002. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. In this case we're pleased to report that the insider purchases were made at close to current prices.

While Prodigy Gold insiders bought shares during the last year, they didn't sell. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Prodigy Gold is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Insiders At Prodigy Gold Have Bought Stock Recently

Over the last three months, we've seen significant insider buying at Prodigy Gold. Overall, three insiders shelled out AU$465k for shares in the company -- and none sold. This could be interpreted as suggesting a positive outlook.

Does Prodigy Gold Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 12% of Prodigy Gold shares, worth about AU$492k, according to our data. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Whilst better than nothing, we're not overly impressed by these holdings.

What Might The Insider Transactions At Prodigy Gold Tell Us?

The recent insider purchases are heartening. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Prodigy Gold insiders are expecting a bright future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Prodigy Gold. When we did our research, we found 5 warning signs for Prodigy Gold (4 are potentially serious!) that we believe deserve your full attention.

But note: Prodigy Gold may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.